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Fidelity & Crime Coverage



Fidelity and crime coverage is a notoriously esoteric field, featuring unique first-party insurance policy wordings and complex claim presentations.

Historically claims were rarely litigated. However, the appetite of insurers and insureds for litigation is changing.

prominent matters

Examples in which we have advised insurers include:

  • Conducting the successful defence of Chubb in the leading decision of All Class Insurance Brokers Pty Ltd (in Liq) v Chubb Insurance Australia Limited (2021) 154 ACSR 78. This was a coverage claim by an insurance broker which collapsed in early 2013, as an alleged result of fraudulent misappropriations by its former sole director, shareholder and company secretary. The Federal Court found that Chubb was entitled to avoid the policy for the fraudulent non-disclosure of the insured’s sole director.
  • Advising and acting in a crime coverage claim involving a well-known insurance brokerage, where a first-party loss in excess of $10 million had allegedly occurred as a result of the fraudulent conduct of a former managing director
  • Advising and acting for insurers in a crime coverage claim involving fraudulent misappropriations made by the CFO of a local council in New South Wales over many years
  • Advising and acting for Chubb Insurance Australia Limited in a pending claim brought by a prominent insurer for losses allegedly caused by fraudulent employees of the Property Claims Division of that insurer

Unrivalled experience

We are market leaders in advising insurers on complex coverage issues including:

  • The activation of the various, complex crime coverage Insuring Clauses, including Employee Cover, Client Cover, Forgery Cover, and Computer Crime Cover
  • The satisfaction of the vexed requirement of ‘direct loss’, and the competing, unresolved legal approaches to this issue
  • The satisfaction of the ‘discovery’ element of the policy, and the impact of the carve-out of discovery by a dishonest or collusive executive
  • The meaning of the consequential loss exclusion in the policy
  • The meaning and application of the proof of loss clause
  • The application to fidelity and crime coverage claims of non-disclosure principles
  • The application to fidelity and crime coverage claims of Limitation Act defences
  • Various aggregation mechanisms that apply to fidelity and crime coverage losses.

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